Egypt: Egyptian Guarantee Register (Legal Alert 144)
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Far. 115 from 2015
The Financial Regulatory Authority (“ENG“) launched the Egyptian Securities Registry in accordance with Securities Securities Law 115 of 2015. Egypt is considered one of the first countries to enact a law regulating movable securities in the Arab region.
The Egyptian Collateral Register is a central electronic record prepared for the publication of movable collateral and is subject to the supervision and control of the FRA. Movable securities can be published by completing the form prepared for this purpose, including all the basic information of the security agreement. In addition, the law excluded the pledging of furniture belonging to the Egyptian government or foreign embassies, concessions or licenses granted by the government, furniture belonging to banks (except if necessary for the financing of their purchase), furniture personal (except if necessary for the financing of their purchase), as well as the pledging of goods held in common between several people (except if all the owners agree to the pledge).
This law aims to regulate the procedures for guaranteeing non-possession on furniture by facilitating financing, reducing its risks, allowing the financing of small and medium-sized enterprises in the event of the absence of real estate assets, preserving the rights of creditors by setting priorities in the event that the movable property is guaranteed for more than one creditor and prevents the debtor from transferring guarantees or renewing collateral without informing the creditors.
The most important advantages of the law are:
- Replacement of the paper system by the electronic system;
- Registration of movable securities in the possession of the debtor without being in the possession of the creditor;
- Improve the situation of the competitiveness of investments in Egypt by improving the ranking of Egypt in the index of obtaining credit in the Doing Business report;
- Authenticate the information published in the register as official supporting documents;
- Fixing of a penalty for alienation of movable property without the consent of the creditor;
- Organize enforcement proceedings on furniture and arrange creditors’ rights.
This register represents a positive credit for the Egyptian banks, because it inspires the confidence of the donors to obtain their rights, and to determine urgent litigation procedures to preserve their rights. As of December 2020, a total of 64,658 publications in the register were made, for a total amount of Egyptian pounds 721.2 billion, indicating that many production and service companies, and in particular small and medium-sized companies received funds to facilitate their operation. .
Finally, the Movable Guarantees Law is a drastic measure taken by the Egyptian government to improve the investment climate that reflects the efforts and initiatives of the government to stimulate the use of non-bank financial instruments to provide funds and expand the concept of movable property used as a guarantee of financing to achieve sustainable development of investments.
Registration link: https://www.ecr.gov.eg/
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The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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